The National Board of Revenue (NBR) has doubled the corporate income tax rate to 20 per cent for manufacturers of freezers, refrigerators, motorcycles, air conditioners, and compressors starting from the fiscal year 2025-26.
In a notification issued on Wednesday, NBR said that manufacturers of these electronic appliances and motorcycles must pay the revised tax rate until June 30, 2032.
The decision comes as the government seeks to bolster revenue collection, enhance fiscal capacity, and reduce reliance on borrowing from both domestic and foreign sources to finance expenditures.
This aligns with conditions set by the International Monetary Fund (IMF) as part of the $4.7 billion loan approved for Bangladesh in January 2023.
The IMF has recommended reforms to Bangladesh's tax system, including rationalising exemptions, improving compliance, and separating tax policy from administration.
It has also advised implementing a comprehensive strategy to reduce subsidies and address arrears in the electricity and fertiliser sectors.
Bangladesh has one of the lowest tax-to-GDP ratios globally, with widespread tax benefits contributing to the shortfall.
The government provided Tk 1.63 lakh crore in tax benefits, also known as tax expenditures in FY25.
The NBR began offering tax privileges to freezer, refrigerator, and motorcycle manufacturers in July 2009, initially setting the corporate tax rate at 5 percent for 12 years.
The concession was later extended, but the rate was increased to 10 percent from fiscal year 2020-21, with air conditioners added to the list of eligible products.
These incentives aimed to promote locally manufactured goods under the "Made in Bangladesh" initiative.
